Carrier consolidation can be injurious to your wealth

It has been a constant theme of ours – carrier consolidation is going to cause some serious pain for telecom equipment makers. By using their dominant position, they can squeeze the proverbial blood from stone. Tellabs learned this hard lesson and reported a drop in revenues.

You see they were counting on selling some Fiber To The Curb (FTTC) gear to BellSouth, which went ahead and got itself acquired by AT&T. AT&T put hold on those plans, and is thinking what it is going to go about those 1.5 million lines. “Two of our top 10 customers have suppressed spending with us,” said Tellabs’ chief executive officer Krish Prabhu during last week’s conference call.

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